Unsold property units on the rise in Malaysia

The number of unsold property units in Malaysia have increased due to unreleased Bumiputera lots and loan rejections, says the Real Estate and Housing Developers Association (Rehda).

The percentage increased by 14% in the first half of 2015 ended June 30, 2015 from the preceding half ended Dec 31, 2014, according to Rehda’s survey. Most of the units which were unsold were in Kedah, Penang, Selangor and Johor.

Also the Rehda Property Industry Survey for the first half of 2015, the number of unsold units rose to 78% from 64% in six months before and 57% in the first half ended June 30, 2014.

"Unreleased Bumiputera lots and loan rejections by banks are the top reasons for the unsold units," said Rehda president Datuk Seri Fateh Iskandar Mohamed Mansor during a press conference on Friday.

He said the percentage of potential property buyers who had failed to secure loans had increased from 29% in the second quarter of last year to 35% during the first half this year.

Most of the loans rejected, he said, were those involving residential property priced between RM250,001 and RM500,000 and between RM700,001 to RM1mil.

Respondents of the survey were 125 property developers, who are Rehda members.

He said respondents of the survey indicated that the Goods and Services Tax (GST) had increased the overall cost of doing business, as well as pushed up property prices.

He said 80% of the respondents cited a cost increase of between 3% and 5% while 67% of the respondents indicated between 3% and 5% hike in house prices due to GST.

Respondents of the survey were pessimistic about the outlook for the property market in 2H 2015, but pessimism was expected to reduce in the following six months, he said. - By The Star